But an investor can buy structured settlements from the secondary market, where it works like a normal investment instrument, like a bond. If an investor wants to buy structured settlements, he has to notice, that the federal laws regulate these actions and the court acceptance is always needed.
1. The Broker Finds The Buyer.
The settlement market is a special market and the successful brokers are specialized in these products. Ask references and make sure the broker candidate belongs to The National Structured Settlements Trade Association. And talk with the investor, who have used the services of this particular broker lately. When you buy structured settlements you have to avoid scams.
2. An Attorney Is Needed.
Already a broker can forecast, what actions have chances to go through in the court, which has to accept every deal. But because these transactions are full of important details, it is useful to hire an experienced attorney, who can check all the important details.
3. Use The Calculator To Get The Present Value Of The Settlement Program.
When you will buy settlements, you will buy payments, which will happen during many years in the future. Because the money received later is less valuable, than the money received right away, you have to make the calculations. You have to discount the future payments into the present value by using a certain interest rates.
For this you will need a settlement calculator. Now, when you know, what is the present value of the candidate program, you will make an offer. This market has industry standards, which regulate the price settings very much. A usual quote is to offer 60 – 70 % of the present value to guarantee an accepted profit. The terms of the settlements have big differences. If the settlement will pay during a certain amount of years it has more value, than a settlement, which will pay during the life-time of the receiver.
4. Your Brokers Must Ask Multiple Quotes.
This market has buyers and sellers like in whatever market. It means, that you have to use the competition power in order to make the bidders to compete against each to lower the prices. It is wise to buy settlements during a low economy, because then these products are cheaper.
5. Make Sure You Will Get The Benefits In The Contract.
As said the Federal Structured Settlement Act regulates the transactions, because the settlements have benefits, like the tax-free feature, which are very special ones. The tax-free benefit can be the biggest part of the future profits, so it is important to guarantee that you as a buyer can get it. It is wise to let the attorney to check the terms and to discuss with the court before you sign anything.
